EDIT:
As you can see in post 4, Emrexcem posted some code. I finally got around to testing it, and I am blown away. Turns out it fundamentally remakes the kindle into a non-ad version, allowing us to be able to use YiFanLu's custom screensaver mod - http://yifan.lu/p/custom-screensaver/

Restoring ads
1. Open extensions/AdToggle/bin/toggleads.sh
2. comment out the first chunk of code (labelled as removing ads)
3. delete the # mark in front of the second chunk of code (labelled as restoring ads)
4. Run the script as in step 4 above.
5. (or just use v2.1, there are two profiles for this.)

Optionally just SSH in and delete /var/local/adunits, then move /var/local/adunits.bkp to /var/local/adunits

UPDATE: does not work, as expected. Ads removed by Amazon can not be reactivated by this tool. Did not backup the "ads-folder" from my KSO Touch (until one hour ago) so anybody able to upload this adunits? Would like to recheck if I can activate the ads after having a non-ad Touch.

UPDATE: does not work, as expected. Ads removed by Amazon can not be reactivated by this tool. Did not backup the "ads-folder" from my KSO Touch (until one hour ago) so anybody able to upload this adunits? Would like to recheck if I can activate the ads after having a non-ad Touch.

From what I gather, you need the adunits, and also the /usr/share/blanket/ad_screensaver as well as /mnt/us/system/.assets folder. I'll send you a PM with my zips.

Didn't you just answer your own question with a question?
Google: man touch

Oh, I have a pretty good idea of what touch does, thankyouverymuch :-)

And strangely enough, my man for touch doesn't mention the side effect of touch which is relevant here.

But the point is that the script looks for a directory (google* man bash) which obviously won't be there (you having renamed it) -- so what is the point of creating a regular file of the same name?

Anywayz, thanks geekmaster, that's sort of what I thought -- that something else is trying to force it back into ad-supported mode, and the file thwarts it. Except on my kindle it worked (and continues to work) without the file (5.0.4).

* if you don't have at least one instance of bash open on your desktop...